Senator COLBECK (Tasmania) (11:40): I rise to make my contribution to the debate on the Illegal Logging Prohibition Bill 2012. I note that this legislation has a reasonable history through this place with two Senate inquiries so far, through which the opposition has played a very constructive role in its development. The government is trotting around the countryside a whole range of allegations about where the opposition is on that, which I am more than happy to refute. But I indicate that we will not be supporting this legislation because the government is not prepared to put in place some sensible modifications which we have suggested over a period of time to actually make this legislation workable and not become a weapon to be used against the forest industry by extreme environmental groups. And we know that that is what will happen because we have experienced it and we have seen it.

The government claims to be negotiating with industry around this legislation, but as late as today the Australian Timber Importers Federation said: 'It is considered that in its present form the bill is inefficient, bureaucratic and probably unworkable.' This comes from the organisation that the government has been negotiating with around the regulations that sit under this piece of legislation. The opposition remains concerned about the way the regulations align with the legislation. But it is not only the opposition that remains concerned; some of our key trading partners also remain concerned.

In what has been a quite unusual circumstance in relation to a piece of legislation, the Rural and Regional Affairs and Transport Committee has received representations from Canada and New Zealand—not countries you would think of as having poor forest management standards or systems, or even associate with illegal logging—expressing their concerns about the impact this legislation will have, the bureaucracy it will impose and the costs it might impose on the industry. Also, Indonesia, Malaysia and Papua New Guinea have expressed concern about the legislation, the level of the government's consultation with them and the mechanisms by which the government proposes to introduce the legislation. And that comes back again to the concerns that the opposition has had.

It is not as if we have not taken this process seriously. We have participated in two Senate inquiries, and I do not think you could accuse us of having been anything but constructive when the government brought forward the exposure draft of this legislation. In fact, I am happy to acknowledge that government senators on the Senate committee were more than happy to take up a number of recommendations made by the opposition. So there have been some changes to improve the bill to align it with what the opposition saw as reasonable to try and make it a systems based system and less bureaucratic than it was—and it was an absolute minefield to start with. So seriously have we taken this legislation that the Leader of the Opposition actually wrote to the Prime Minister to outline our concerns and put them in front of the government. The concerns relate to the implementation of the bill. The regulations are so important and so fundamental to the workability of the bill that we want to see them before the bill comes into effect.

It is important that that is the case. If they do not, we will see a range of allegations made against companies importing timber from overseas as to their legality. Whether they are true or not, those allegations will be made and Australian businesses, being defensive of the perception of them as businesses, will take defensive action as well and, most likely, stop importing the products. That is going to create significant issues for those importing nations.

The opposition wants to work cooperatively with these companies. We recognise that they are working to put processes in place to deal with illegal logging. Like the government, we had a policy at the last election to take measures to prevent illegally logged timber coming into Australia. We acknowledged the problem; we acknowledged the issue. There are currently two processes operating in other parts of the world. The United States has the Lacey Act, which itself has its own problems—which, I think, has been recognised by the moves to modify the Lacey Act at the moment to take out some unintended consequences. The European Union, the EU, are looking at the FLEGT process. That process works on a bilateral system where countries within the EU negotiate country-to-country arrangements with their trading partners to put in place regulations or systems to prevent illegal logging and the sourcing of illegally logged timber—a cooperative process and a process that builds capacity in those countries that are looking to do that.

That is the sort of thing the opposition want to see. We do not want to provide a blunt instrument for rogue environmental groups to attack legitimate business and legitimate industry with allegations that they are importing or exporting from a country and importing into Australia illegally sourced products. That is what will happen; we have already seen that process commence. Greenpeace in evidence to the inquiry alleged that up to 80 per cent of the timber coming out of Papua New Guinea, for example, was illegally sourced. What is the basis for those allegations? The basis for those allegations is that they—that is, Greenpeace—have determined what the definitions around illegally sourced timber will be. The problem is that we do not have any of that sort of work decided yet as part of the process.

Having spoken to industry players just last Friday night, we know that the regulations are nowhere near being ready yet. One of the things the opposition wanted to do in a cooperative way with the government as part of the approval process for this legislation—we have had these conversations with the minister—was to have the regulations pass through a Senate inquiry process so that we could check that the capacity to misrepresent was not there and the regulations were working. Now the minister has indicated to us that the regulations might be available by the end of the year. Indications to me from industry as late as last Friday night were that they have no chance. We are looking to have a process where, because the regulations under this legislation are so important and so fundamental, everybody who is participating in the timber trade industry has a good understanding of those before everything comes into effect.

The government are desperate to get some achievement out of the ag portfolio, given that this is the only policy for agriculture that the government took to the 2010 election. There was nothing else to do with anything else within agriculture; Tony Burke released one policy only and that was the illegal logging policy. We should be very suspicious of anything Minister Burke puts on the table given his performance over the past few months. But this is the only policy they had and they are so desperate to get some achievement on the table that they are prepared to push this through. They are not prepared to be cooperative. They will do a deal with the Greens—there is not much doubt about that—and they will create a weapon to be used against industry by extreme environmental groups. I have no doubt about that. You can see it being lined up right now.

Greenpeace say that 80 per cent of the timber coming out of PNG is illegal—on the basis of their own definitions; they make up their definitions, which is the way these groups often operate—and so what is that going to do to Papua New Guinea's forest industry? It is a $60 million-odd export industry; about one-third of that comes to Australia. So are we going to create through this process a crash in the New Guinea forest industry and are we going to see that impact work back down through the local communities? The Papua New Guineans think that is the case; it is what they are concerned about. They are more than happy to work to stop illegal logging. They do not want an organisation like Greenpeace to come in and define for them what is legal and what is illegal. They would like to understand what our regulations are, they would like to understand what our regulations say and they would like to work cooperatively with Australia to develop mechanisms to prevent illegal logging.

At what point do we recognise what a government says is illegal or not? That is one of the fundamental questions we have been asking through the development of this legislation. If a government says to us something is legal, who are we to say it is not? One of things that has been put into place as part of the development of this legislation is a requirement of due diligence. Industry generally has accepted that that is a reasonable way to go. I know that the PEFC system, a global umbrella group that takes forest certification schemes and aligns them across a global platform, has said that it is developing a due diligence system to incorporate into its forest certification system.

That should be welcomed because, as I said before, it puts in place a systems based mechanism, as part of an industry's general certification process, to ensure that due diligence is taken to ensure that a product has been sourced legally. It can become a verification scheme as a part of that proper due diligence process. That should be welcomed. I would urge other certification systems to do the same.

The Indonesian government is putting in place a timber legality assurance system. My understanding is that there is a lot of work being done between Indonesia and the EU around the recognition of their system. It is called the SVLK. I will not try to pronounce it, because it is difficult and I would probably get it wrong, but let us call it the SVLK because that is how it has been recognised. It is their national timber legality assurance system. One of the things that the opposition wanted as part of this process was adequate, sensible time for these systems to be put into place so that the allegations, which I know will come from these extreme environmental groups against companies importing timber and countries who were exporting timber to us, have some parameters around them—so we know what the rules are. At this stage we do not know which timber products are in and which are out.

The reality is that the more complex a timber product—the more it has been modified—the more likely it is to have illegally sourced timber in it. A medium-density fibreboard, for example, is the sort of product where you are most likely to find illegally sourced product. It is not likely to come in the form of solid timber products. The allegation might very well be made that it will, because that is about stopping forestry—that is the Greens and the extreme environmental groups' agenda of shutting down forestry—but the greater likelihood is that it will be in complex products. It may also, perhaps, enter in things like furniture where the timber is sourced from a number of different places.

Let us not pretend that the issue of illegal logging is not a problem. I am aware of the study out of Laos where the official inputs to a particular sawmill were something in the order of 350,000 cubic metres per year of logs, while the output was something like 650,000 cubic metres—so either they have a fantastic conversion rate or there is something going on. It is quite obvious that something is going on and we need to deal with that. We genuinely need to deal with that, but from my understanding a lot of that timber is going to a neighbouring country to be put into furniture. We do not know whether that is going to be included in the scope of the legislation yet, so, at the moment, what the government proposes is to create an offence. At the moment the proposed date of effect of that is the date of the royal assent to the legislation; then, two years after that, the regulations will come into effect. They will define other elements of the offences, including what particular products are going to be included and whether those highly modified, complex products are included.

Are paper, MDF boards and small batches of furniture that a small business might go to South-East Asian countries to buy going to have to be declared at the border? Are they going to have the capacity to do the due diligence down the supply chain—to actually determine whether the products are legally sourced or not? None of that is yet known. The opposition is saying, 'Let's deal with that once we have put the offence in place; let us deal with that properly once we have decided what is in and what is out—once we know those things.' Let us not create a bureaucratic nightmare that industry is not going to be able to manage properly. Let us let them know what the rules are before we throw them out for the extreme environmental groups to get hold of.

If the government do not believe that that will happen, they only have to look at their complete mismanagement of the IGA process—the Tasmanian Forests Intergovernmental Agreement—where they created the weapon. Again, Tony Burke is involved in this. Tony Burke, Julia Gillard and Lara Giddings signed an agreement around forestry negotiations in Tasmania, and notional reserves, or areas to be considered for inclusion as reserves, were created as part of that process. Those forests immediately became a weapon against a company called Ta Ann in Tasmania. Accusations of them logging in those forests were made in their markets. Industry and business moved away from their products.

Ta Ann are not a logging company. They do not harvest a stick; they take product that is supplied to them by Forestry Tasmania. They are not involved in logging operations. They do not get to choose where their timber comes from. Their markets were told that they were selling old-growth products out of these reserve areas—or areas proposed for reserves; they have not been declared. That company, after making an $80 million investment, is now considering leaving the state. One hundred and sixty jobs may be lost, all based on misinformation and the allegations made against them in their markets. So, if anyone does not believe that the government's mismanagement can create a problem, there is the perfect example and this company is the victim. That is exactly the same thing that will happen as soon as this declaration comes into effect with the passing of this legislation. There will be allegations about illegal sourcing of timber and Australian businesses which are the recipients of that product, particularly at a retail level, will have market campaigns run against them. They will take the only defensive action available to them, which is to stop sourcing the product. That will happen. You can see the environmental groups lining up. Worse—if you look at the amendments proposed by the Greens, they are looking to give another layer of armour to those environmental groups by making it about trade between states. If the government does not believe that that is part of the process, just read the amendments that are being proposed by the Australian Greens to this piece of legislation in this place. That is what will happen.

We have treated this process with respect. We have negotiated or tried to negotiate with the government. Tony Abbott wrote to the Prime Minister suggesting a way forward. Minister Ludwig has written back to Tony Abbott rejecting that way forward. They would prefer to deal with the Greens and they would prefer to give the environment groups a weapon against Australian business, Australian industry and our trading partners, so for five countries to express concern is quite a step. Canada and New Zealand—as I said before, not countries that you would associate with bad logging or forestry practice—have even expressed concern about the issues around that.

In that context, the opposition cannot support this legislation even though we have a similar policy, because we recognise the government's complete failure to be able to manage the process properly. (Time expired)